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Sir Martin Sorrell of S4 Capital: Status quo of the ad industry is destroyed
Liz Unamo| 27 de julio de 2020
Sir Martin Sorrell
According to Sir Martin Sorrell, executive president of S4 Capital, the status quo of the advertising industry has been destroyed by the coronavirus pandemic. “We are basically witnessing a true bloodbath in Q2 in terms of results. So with the status quo destroyed, there is no reason for digital change not to take place at a swifter pace at the consumer, media, production and company levels. Covid-19 has had an extreme effect on digital acceleration,” he said. “Digital now represents over half the world’s media budgets, which amount to around $500 billion, of which this year’s digital will be worth at least $250 billion. As we estimated for 2024, it will account for some two thirds of the market,” Sorrell told Jack Otter in an interview on the Barron’s Roundtable show on Fox Business. He said that when dealing with such giants as Google, Facebook and Amazon, it makes more sense to work with them rather than try to compete with them, and noted that along with the three aforementioned western platforms, their Chinese counterparts Tencent, Alibaba and TikTok are also important forces in today’s advertising. While ads in traditional media have dropped between 10 and 20 percent, in digital they have remained stable. “From last year’s $250 billion total, Google took in some $165 billion, Facebook around $65 billion, Amazon between $15 billion and $20 billion – depending on the metric used – while TikTok reached around $7 billion,” Sorrell said. Others, such as Snap, Twitter and Pinterest earned between $2 billion and $2.5 billion. In the light of boycotts that have affected several of these platforms, he recognized that Facebook has become more responsible than before. But he added that threats such as boycotts are not the way to go. “Once you have issued a threat,” Sorrell said, “it no longer has any power.” He advised advertisers that it is much more powerful to have a private conversation and “speak directly with platforms about their concerns in order to resolve them.”
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